How is the BUDGET prepared by the Government?

The presentation of Union Budget by Finance Minister has been shifted from last week of February to 1st of February every year.

From 2017-18 onwards, Railway Budget (since 1924) has also been merged with the Union General Budget.

Budget division of the Department of Economics Affairs, Ministry of Finance, is the nodal agency for preparation of General budget. It is based on the data provided by each Ministry.

The data provided by Ministries are of three types:

1. Budget Estimates (BE): of receipts and expenditures for the coming financial year or budget year.
2. Revised Estimates (RE): of receipts and expenditures for the current financial year.
3. Provisional Actuals (PA): of receipts and expenditures of the previous financial year.

Based on the above data, the Annual Financial Statement is prepared and placed before the Parliament.

👉Procedure of laying Budget

1. President's recommendation is taken for introduction and consideration of Budget in the Lok Sabha.
2. Budget is then laid before the Lok Sabha along with the Budget Speech by the Union Finance Minister followed by the presentation of Finance Bill.
3. Discussion on Budget in Lok Sabha is conducted in two stages:
1. General Discussion (NO Voting).
2. Detailed Discussion.
4. After Detailed Discussion, voting for Demand for Grants takes place.
5. After voting, Appropriation Bill is introduced and voted upon, thereby legally authorising Central Government to spend money from Consolidated Fund of India.
6. Appropriation Bill and Finance Bill is then sent to Rajya Sabha for discussion. Unlike Lok Sabha, Rajya Sabha does NOT have power to vote on Demands for Grants and has to return them within 14 days with or without recommendations. However, Lok Sabha may not accept the recommendations.
7. Finance Bill is then sent to President of India for his assent. The President does NOT have power to reject it.